South Korea Expands Voice-Phishing Refund Protection to Crypto Assets from October 2026
Until now, victims often faced difficulties when money stolen through voice phishing was converted into Bitcoin, USDT, or another crypto asset before the relevant account could be frozen.
This is expected to change from October 2026. South Korea is expanding its telecommunications financial fraud refund framework so that crypto assets can also be subject to account-freezing and victim-refund procedures.
On July 15, 2026, the Financial Services Commission announced a proposed amendment to the Enforcement Decree setting out how crypto assets will be returned, valued, and, where necessary, sold on behalf of victims.
Crypto Assets Will Be Included in the Voice-Phishing Refund Framework
South Korea’s existing voice-phishing refund system has primarily focused on money remaining in bank accounts.
This created a practical gap. Even where stolen funds could be traced to a crypto exchange account, the existing statutory process was not always able to deal effectively with assets that had already been converted into cryptocurrency.
To address this issue, legislation promulgated on March 31, 2026 expanded the scope of recoverable assets from money to crypto assets.
As a result, the revised framework may apply to cases such as:
▪️ A victim purchasing and transferring crypto assets at the direction of a voice-phishing operation
▪️ Korean won transferred by a victim being converted into Bitcoin, USDT, or another crypto asset
▪️ Stolen crypto assets remaining in an account subject to the revised refund framework
The amended law is scheduled to take effect on October 1, 2026.
What Happens If the Stolen Money Has Already Been Converted into Crypto?
One of the most important parts of the proposed Enforcement Decree concerns the form in which the victim will receive the recovered assets.
Where the recoverable asset is money, it will be returned as a monetary amount. Where it is a crypto asset, it will generally be returned according to the type and quantity of that asset.
However, the asset originally transferred by the victim may be different from the asset remaining in the fraudulent account when the account is frozen.
In that situation, the victim will generally receive the asset that actually remains in the account at the time of the freeze.
For example, suppose a victim transfers KRW 10 million and the perpetrators convert the money into USDT. If the relevant account is frozen while the USDT is still there, the refund may be made based on the remaining USDT rather than the original amount of Korean won.
Crypto Assets Will Be Valued at the Time of the Account Freeze
A fraudulent account may contain a mixture of Korean won and several types of crypto assets.
Where different forms of property are mixed together, the proposed rules provide that:
▪️ Money will be valued according to its monetary amount
▪️ Crypto assets will be valued according to their market price at the time of the account freeze
This timing matters.
The relevant price is not necessarily the price when the victim made the transfer or when the refund is eventually paid. Instead, the valuation is based on the market price when the freeze took effect.
Because crypto prices can change rapidly, a prompt report to the police, financial institution, and relevant crypto exchange may be important not only for preventing further transfers, but also for determining the value of the recoverable assets.
Victims May Receive Cash Through a Crypto Sale Support Institution
Receiving crypto assets directly may not be practical for every victim.
A victim may have no experience trading crypto, may not have an exchange account, or may not know how to sell and withdraw the asset in Korean won.
The proposed Enforcement Decree therefore introduces requirements for institutions that may support the sale of recoverable crypto assets.
Where a victim has difficulty disposing of the crypto directly, a designated institution may sell the asset and pay the proceeds to the victim in cash.
To qualify, the institution must have the organization and personnel necessary to support crypto users and assist with victim recovery.
The designated institution and the detailed application procedure will need to be confirmed once the final rules and administrative guidance are issued.
Not Every Crypto Scam Will Qualify for a Refund
The expanded framework does not mean that every crypto-related loss will automatically be refunded.
The case must first fall within the statutory definition of telecommunications-based financial fraud.
Ordinary investment losses, failed private transactions, and contractual disputes are not automatically treated as voice-phishing cases.
Investment advisory scams and romance scams may also require a closer review of:
▪️ How the victim was deceived
▪️ Why the money or crypto was transferred
▪️ Whether the transaction formed part of a telecommunications-based fraud scheme
▪️ Where the assets were located when the freeze was requested
The refund system is also not a government guarantee covering the victim’s entire loss.
Assets must generally remain in the relevant fraudulent account when the freeze takes effect. Where the remaining assets belong to multiple victims, the actual refund may depend on the amount left and the scale of each victim’s loss.
If the crypto has already been transferred to a private wallet or an overseas exchange, separate measures may be required, including a criminal complaint, wallet tracing, transaction analysis, and preservation requests directed to relevant exchanges.
Information Victims Should Preserve Immediately
Crypto assets can move rapidly through multiple wallets and exchanges. Early action is therefore critical.
A victim should promptly contact the police, the bank used for the transfer, and the relevant crypto exchange to determine whether the account or asset can be frozen.
The following records should also be preserved:
▪️ Messages exchanged with the perpetrators
▪️ Call recordings and telephone numbers
▪️ Bank transfer confirmations
▪️ Crypto purchase and transfer records
▪️ Sending and receiving wallet addresses
▪️ Transaction IDs, also known as TXIDs
▪️ Information identifying the exchange and user account involved
Bank records alone may not reveal the full movement of the assets. It is often necessary to organize the entire transaction history chronologically, from the original payment through the purchase and transfer of the crypto assets.
How Decent Law Firm Can Assist
Decent Law Firm’s Virtual Asset Practice reviews the transaction structure and movement of funds in crypto-related voice-phishing cases.
Depending on the circumstances, our assistance may include:
▪️ Preparing materials for submission to Korean investigative authorities
▪️ Coordinating responses involving banks and crypto exchanges
▪️ Organizing wallet addresses, TXIDs, and transaction records
▪️ Assessing whether the statutory refund procedure may apply
▪️ Preparing a criminal complaint and related asset-recovery measures
Cases involving multiple wallets, private wallets, or overseas exchanges may require the statutory refund process to be combined with separate criminal and asset-tracing strategies.
The proposed Enforcement Decree is open for public comment from July 15 to August 24, 2026, and is scheduled to take effect together with the amended law on October 1, 2026. As the rules have not yet been finalized, some details and procedures may change before implementation.
